Adam Smith

Adam Smith (Kirkcaldy, 1723 – Edinburgh, 1790) was a Scottish economist and philosopher of the Enlightenment, and one of the central figures of classical economics. He is best known for An Inquiry into the Nature and Causes of the Wealth of Nations (1776), the book usually considered the starting point of economics as a systematic academic discipline. His exact date of birth is unknown; he was baptised on 5 June 1723, and that date has traditionally been used as a reference.

His father, a lawyer and customs official, died shortly before Smith was born, and he grew up close to his mother. According to his biographer John Rae, he was briefly abducted by Romani people as a small child, an episode that survives in tradition but is hard to verify. He studied at the school in Kirkcaldy and at fourteen entered the University of Glasgow, where he was shaped by Francis Hutcheson, the professor of moral philosophy. He then won a scholarship to Oxford, which he found intellectually stifling, and left in 1746 before the scholarship ended. For a few years he gave lectures in Edinburgh, where he formed a close friendship with David Hume.

In 1751 he became a professor at Glasgow, first of logic and then of moral philosophy, a post he held for twelve years. From this period comes his first major book, The Theory of Moral Sentiments (1759), which argues that morality rests on sympathy, our capacity to imagine ourselves in another's place and to judge our own conduct from the standpoint of others. In 1763 he accepted the post of tutor to the young Duke of Buccleuch, which took him on a journey of about two and a half years through France and Switzerland. There he met intellectuals such as Voltaire and became acquainted with the physiocrats led by François Quesnay. Back in Scotland he devoted himself to The Wealth of Nations, which took years to finish.

In that book Smith explains national wealth through human labour rather than through the stock of precious metals held by the state, as the mercantilists had argued. He examines the division of labour as a source of productivity, the formation of natural and market prices, and the role of competition. His well-known image of the invisible hand describes how each person pursuing his own interest can, without intending it, contribute to the general welfare. From this comes his defence of free trade and of a state limited to basic functions, though his position is more nuanced than is often assumed: he recognised the need for sound justice, public education and some regulation.

His influence has been enormous. His ideas on markets, value and the division of labour shaped political economy in the nineteenth century and remain present in contemporary debates, while his moral thought continues to be studied in philosophy. In his lifetime he was a respected figure in the Scottish Enlightenment, and he held the honorary post of Rector of the University of Glasgow.